EXHIBIT 10.50
UNIT PRICE CONSTRUCTION AGREEMENT ENTERED INTO BY AND BETWEEN ST. XXXX DE
MEXICO, S.A. DE C.V. REPRESENTED BY XX. XXXXXX X. XXXXXXXX, HEREINAFTER REFERRED
TO AS THE "OWNER"; AND ADMINISTRACION TIJUANA INDUSTRIAL, S.A. DE C.V.
REPRESENTED BY MR. PABLO XXXXXX XXXXXXXX XXXXXX, HEREINAFTER REFERRED TO AS THE
"CONTRACTOR"
RECITALS
I. The representative of Owner declares:
a) That Owner is a corporation organized and existing in accordance with
the laws of the United Mexican States;
b) That his principal is in the process of acquiring the ownership of lots
113-A and 113-B, block 18. (the "Property");
c) That his principal needs the Contractor to build on the Property an
industrial building measuring 5,751.11 square meters or 61,904.43 square
feet and other improvements. For such purposes, Contractor has provided
its principal with a work estimate consisting of a catalog of unit price
concepts and matrix attached hereto as exhibit "A" ("Work Estimate").
d) That the building and said improvements are described in detail in the
plans, drawings, blueprints and specifications attached hereto as
exhibit "B", (the "Specifications"), which building and improvements
shall hereinafter be referred to as the "Work"; and;
e) That his principal has granted and delivered to him sufficient powers
and appropriate directions for the execution of this agreement, and
that such powers and directions have not since been modified, limited
nor revoked.
II. The representative of Contractor declares:
a) That Contractor is a company duly incorporated under the applicable
laws of the United Mexican States, as evidenced in Public Instrument
52,543, book 903, before Notary Public Number 3 for the Municipality of
Tijuana, Xx. Xxxxxx Xxxxxx Xxxxxxx, duly recorded before the Public
Registry of Property and Commerce of Tijuana, Baja California on
September 29, 1988, registry number 20,279 page 413, Book XLIII-II
auxiliary Commerce Section.
b) That it is within Contractor's corporate purposes to execute and
perform this agreement and provide urbanization, engineering and
general construction services, and that it has the necessary
authorizations, registrations and licenses to operate as a contractor;
c) That Contractor has the experience, the know-how and the material and
human resources that are necessary and adequate to duly execute and
manage the Work;
d) That Contractor has resources of its own sufficient to fulfill all
labor obligations due to its workers in connection with the Work; and
e) That his principal has granted and delivered to him sufficient powers
and appropriate directions for the execution of this agreement, and
that such powers and directions have not since been modified, limited
nor revoked.
CLAUSES
ONE. SCOPE OF WORK.
1.1 Contractor agrees to perform all tasks and all other on-site work required
to construct the Work on the Property. Contractor shall furnish all labor,
materials, tools, equipment, transportation and all other goods and
services necessary for the performance of the Work.
TWO. SPECIFICATIONS.
2.1 The Work shall be performed in strict compliance with the technical
specifications and quality standards set forth in the blueprints, drawings
and specifications contained in Exhibit "B" hereof, as well as in
accordance with such other specifications and standards as may be indicated
by Owner from time to time in the manner set forth in this agreement
(hereinafter the "Specifications"), as well as on such written instructions
issued by the individual who will be in charge of supervising the Work,
herein contracted by Owner.
THREE. WORK SCHEDULE AND LOG.
3.1 Contractor shall perform the Work in strict accordance with the work
schedule (hereinafter the "Schedule") set forth in Exhibit "C" hereof.
Contractor shall keep an
2
accurate daily log of the progress of the Work (hereinafter the "Log") and
shall submit to Owner a copy thereof, on a daily basis. The Log shall
reflect progress of the Work with respect to the Schedule and shall be
sufficiently detailed as to enable Owner to compare the actual with the
scheduled progress of the Work at all times throughout the performance of
the Work. The Log shall further contain a record of any observations,
clarifications, variations or corrections made by Contractor or by Owner,
in the performance of the Work, in respect of the Specifications.
FOUR. PRICE OF THE WORK.
4.1 Owner shall pay to Contractor the resulting amount according to the
concepts, volumes and unit prices conforming with the work progress for
which Contractor shall present, for its weekly revision and authorization,
the estimates supported with the volume generators in the formats so
indicated by Owner.
4.2 The total price of this operation is $1,931,912.99 (one million nine
hundred and thirty one thousand nine hundred and twelve 99/100) dollars,
United States of America currency, plus the Value Added Tax (v.a.t.), and
it is based upon the estimated volume of work as of this date.
4.3 The ruling unit prices are the ones presented by Contractor for the Work
bidding, pursuant to Exhibit "B" and cannot be subject to change, unless a
written agreement is made on the part of Owner.
4.4 Owner shall pay, as advance payment the amount of $772,765.20 (seven
hundred and seventy two thousand seven hundred and sixty five 20/100 )
dollars, United States of America currency, that shall be proportionately
amortized according to the amounts of the payable estimates presented by
Contractor.
4.5 The balance, less a holdback of 5% of the balance, shall be paid in equal
monthly installments over the course of construction of the Work. Such
holdback amount will be paid to Contractor upon completion and acceptance
of the Work by Owner.
FIVE. PAYMENT OF THE PRICE.
5.1 Contractor shall provide Owner, against payment for any concept, the
invoices corresponding to the total estimate value, which shall meet all
tax requirements as requested by Mexican Law. The payments shall be paid
accordingly to the Schedule.
3
In the event contractor has a delay in the performance of the jobs, the
payments shall be withhold.
5.2 Acceptance of the final payment by Contractor, shall be considered as
Contractor's acceptance of its assumed responsibility regarding each and
all claims that may arise against Owner in connection with Work and with
the present agreement.
SIX. RESPONSIBILITY FOR SPECIFICATIONS.
6.1 Contractor shall be responsible for the proper design, engineering and
supervision of the Work, in accordance with the Specifications, and in
accordance with all applicable federal, state and local legal requirements,
and common local industry practices for capacity, strength, vibration and
function. Contractor shall be solely responsible for defining the
Specifications and represents to Owner that same are true and correct, and
in conformity with all industry standards and in compliance with all
applicable legal requirements.
SEVEN. OWNERSHIP OF SPECIFICATIONS.
7.1 Owner shall be the sole and exclusive owner of the drawings, plans,
blueprints and any other documents containing the Specifications, including
all the information contained therein, which shall constitute proprietary
information. Contractor shall provide Owner, at the time the Work is
accepted by Owner upon its completion, with one final set updated according
to the actual performance of Work, printed in Mylar, of all reproducible
drawings and specifications.
EIGHT. QUALITY OF WORK, LABOR AND MATERIALS.
8.1 All work, labor and materials employed, provided or utilized by Contractor
or its sub-contractors in the performance of the Work, shall be of the
highest quality available, or of any lesser quality authorized in the
Specifications, provided, however, that in no event may Contractor or its
sub-contractors employ, provide or utilize work techniques, labor or
materials that fail to meet the quality requirements or other
specifications set forth by the current or applicable construction laws,
regulations, ordinances or guidelines in force in Mexico.
NINE. NO AGENCY OR REPRESENTATION.
4
9.1 Contractor shall not be considered a representative or agent of Owner,
provided, however, that Contractor may act on behalf of Owner in the
obtainment of permits and the procurement of materials, to the extent
therefore necessary and in such other specific cases as approved in
writing by Owner.
TEN. REQUIRED PERMITS AND REGISTRATIONS.
10.1 Contractor shall obtain at its expense all required licenses,
authorizations and permits, including, without limitation, the
corresponding construction license from the municipal government of
Tijuana, Baja California. Likewise, Contractor shall properly file all
required registration applications before the corresponding governmental
agencies, including, without limitation the registration of the Work with
the Mexican Institute of Social Security. All such licenses,
authorizations, permits and registrations shall clearly show Owner as the
owner of the Work.
10.2 Owner will promptly deliver to Contractor all information and documents
held by same, which result necessary for the filing, processing and
obtainment of the above referred permits, licenses, authorizations and
registrations.
10.3 The originals of said permits, licenses, authorizations and registrations
shall be delivered to Owner upon final acceptance of the Work.
ELEVEN. START AND COMPLETION DATE.
11.1 Contractor shall initiate performance of the Work immediately upon
execution hereof and of reception of advance payment ("Initiation Date"),
and shall complete same in the manner herein required within six (6)
months from the Initiation Date. The date of expiration of the above
referred six months term shall be referred to hereinafter as the
"Completion Date". If in the reasonable opinion of the Owner it becomes
necessary that Contractor operates night shifts or weekends and holidays,
or that it hires additional labor force, in order to complete the Work by
the Completion Date, Contractor shall operate the necessary night shifts,
weekends or holidays, or hire such additional labor force as is therefore
necessary, without additional cost to Owner, unless such additional
efforts are necessary as a result of modifications to the Specifications
authorized by Owner or are otherwise attributable to Owner, or are
necessary because of a Work delay which is excused pursuant to the
following paragraph.
5
11.2 If the performance of the Work is delayed due to actions or omissions of
Owner, or to acts of god, such as fire, flood, rain, wind or others beyond
the control and without the fault or negligence of Contractor which
temporarily prevent the performance of the Work, the Completion Date shall
be set back the same number of days during which said actions, omissions,
or acts of god prevented the performance of the Work. Contractor shall not
be entitled to demand payment of damages or increased costs suffered due
to the delays above mentioned, except for delays caused by actions or
omissions of Owner. The supervision and inspection of the Work by the
Owner, and the requirement of corrections to non conformities with the
Specifications shall not be deemed to constitute a delay due to Owner.
11.3 The modifications to the Specifications directed or requested by Owner
shall not constitute a reason for setting back the Completion Date in the
manner above indicated, unless such is agreed to at the time said
modifications are communicated to Contractor.
TWELVE. MODIFICATIONS TO SPECIFICATIONS.
12.1 At any time during the performance of the Work, Owner may direct or
request Contractor to modify the Specifications as it deems appropriate
and necessary. The Price shall be adjusted in accordance with the increase
or reduction in Contractor's accruable fees, labor, materials and sub-
contracting expenses resulting from the modification and considering the
time impact on the Completion Date. Such modifications shall be notified
to Contractor by a Change Order drafted in the manner set forth in Exhibit
"C" hereof. No changes shall be made to the Specifications without the
written approval of the Owner.
THIRTEEN. CONTRACTOR'S SUPERVISION OF THE WORK.
13.1 Contractor shall supervise and direct the Work using its best skill and
attention in order to make sure that all work techniques, materials and
labor used in the performance of the Work comply with the terms of this
agreement.
13.2 To the above effects, Contractor shall keep at the Work site during the
performance of the Work a competent superintendent, satisfactory to Owner.
In case a superintendent proves unsatisfactory to Owner, same shall be
promptly replaced by Contractor, upon written request by Owner. The
superintendent or its assistants, shall not be changed without 30 days
notice to Owner in writing.
6
FOURTEEN. OWNER'S INSPECTION OF THE WORK.
14.1 Contractor shall allow Owner to inspect the Work at any time, without need
of prior notice, in order to verify performance of the Work in accordance
with the terms hereof. Such supervision shall not relieve Contractor of
any responsibility or liability deriving herefrom in connection with the
performance of the Work.
FIFTEEN. CORRECTIONS.
15.1 Should any part of the Work or the materials utilized in its performance
be found by Owner to be defective, damaged or in any way non conforming
with the Specifications, Owner shall immediately notify Contractor
thereof, and Contractor shall, immediately or as soon as it is
practicable, remove, replace, reconstruct or refinish, as appropriate and
at the sole reasonable discretion of the Owner, the defective, damaged or
non conforming materials or portion of the Work. Such correction shall be
entirely at the expense of Contractor and shall not originate the
Completion Date to be set back.
15.2 In the event Contractor fails to correct the Work as provided in the
preceding paragraph, Owner may, upon five (5) days written notice to
Contractor, order Contractor to stop performance of any part or all of the
Work and may correct or have corrected the corresponding deficiencies. In
such event, Owner shall deduct the actual cost thereof from the Price.
Such correction by Owner shall not imply a waiver of its rights to any
other remedies available under this agreement.
SIXTEEN. HAZARDOUS MATERIALS AND WASTE.
16.1 Contractor shall not make use of hazardous materials in the performance of
the Work and, in the event that any hazardous wastes or residues are
generated in the performance of the Work, it shall, a) handle and dispose
of same in full compliance with all legal and technical provisions
providing for handling and disposal of such wastes, and b) shall perform
or have performed all cleaning work necessary in order to ensure that the
Work is delivered entirely free from any such contamination and is in full
compliance with the applicable environmental requirements. Contractor
shall further hold harmless and indemnify Owner from and against any
claim, lawsuit, judgment, administrative procedure or penalty in
connection thereof.
7
SEVENTEEN. LABORATORY TESTS.
17.1 Contractor shall, at its own cost, hire laboratory services to perform
any tests deemed convenient, provided, however, that the results thereof
shall not be binding or conclusive under this agreement. Owner must be
notified at least twenty four hours in advance of the performance of any
such tests. All Work required to be tested and thereafter buried
underground or otherwise concealed, shall be tested before being buried
or covered and the test conditions shall be applied for a sufficient
length of time to permit adequate inspection. Contractor shall furnish
Owner complete written test results and data, as soon as same are
available. In the event the test results indicate that the part of the
Work tested fails to conform with the Specifications, Contractor shall
immediately make the corrections thus necessary, without need of a
written or verbal request from Owner.
EIGHTEEN. INSURANCE.
18.1 Owner shall obtain at Owner's expense, all risk coverage for the full
cost of the Work in US Dollars and for the sum legally required, which
shall provide at least, coverage for the following:
18.1.1 All risks of physical damage including but not limited to fire, broad
coverage risks, (but excluding earthquake and flood) for the term of
construction, including the materials, components and equipment of
Owner, for the full cost of replacement of the construction effected up
to the date of the damage;
18.2 Contractor shall obtain at Owner's expense the following insurance
coverage's:
18.2.1 General public liability including comprehensive automobile insurance
showing owned, non-owned and hired automobile coverage, in an amount
equal to or greater than US$2,000,000.00 (two million and no 00/100)
dollars, United States of America currency, per occurrence, to insure
Owner and Contractor at all times from any claims resulting from injury
or death to any person or persons, or damages to property caused in
whole or in part by actions or omissions of Contractor, Owner or any of
Contractor's sub-contractors, suppliers or any other party directly or
indirectly employed or hired by Contractor or its sub-contractors in
connection with the performance of the Work, or any other activity
associated or related with the Work, or
8
acts of God or force majeure, as provided by the Civil Code for the
State of Baja California and the Federal Labor Law of the Mexican
Republic.
18.2.2 The above-referred insurance policy shall be in the name of Owner and
the Contractor and issued by an insurance company satisfactory to
Contractor and Owner authorized to do business in Mexico.
18.2.3 As evidence that Contractor has contracted on behalf of Owner the
insurance as required above, it shall within 5 (five) days after the
execution hereof, deliver to Owner appropriate certificates of insurance
issued by the insurance company evidencing that Contractor has duly
obtained the insurance required hereunder, and that such insurance is
primary as respects any claims, losses or liability arising directly or
indirectly from the insured's operations.
18.3 Contractor shall not start the Work until after the above-referred
insurance certificates have been delivered by Contractor and sub-
contractors and the insurance has been approved by Owner and Contractor.
Approval of the insurance by the Owner shall not relieve or reduce the
liability of Contractor hereunder. Owner shall be named as an insured
and all policies shall provide that Owner is to receive 30 (thirty) days
prior written notice of cancellation of such policy or material change
in coverage therein. In the event of casualty, Owner and Contractor
shall promptly initiate adjustment procedures with the respective
insurance company and the proceeds paid thereby will be distributed
among the parties hereto in accordance to their respective interests as
they appear herein.
18.4 Contractor shall not be obligated to provide insurance coverage for any
employees nor for the equipment of the Owner at the Work site.
NINETEEN. LIABILITY FOR DAMAGES.
19.1 Contractor shall be liable for all losses or damages to all Work, to the
property of Owner, or to third parties' property, as well as for injury
or death of its own, and of Owner's employees, agents or any other
persons, while they are on the site of the Work or on the Property
during the performance of the Work, or in adjacent areas, when such
damages, injuries or deaths are caused in whole or in part by any acts
or omissions of the Contractor, including the Contractor's own
negligence or failure to provide appropriate safety measures and
adaptations.
TWENTY. GUARANTEE.
9
20.1 Unless otherwise specified under the various headings herein, all
workmanship and materials used in the performance of the Work, as well as
all fixtures and equipment furnished by Contractor and installed under
this agreement, shall be absolutely guaranteed by Contractor for a period
of one (l) year after their final acceptance in writing by Owner. This
Guarantee shall be effective notwithstanding any additional guarantees
obtained by Owner from the manufacturers or suppliers of any materials,
fixtures and equipment. Any imperfections or defects which may develop or
be discovered in the workmanship or materials used, or in the fixtures or
equipment furnished by the Contractor during such 1 (one) year period
shall be immediately repaired or replaced, at Owner's option, by the
Contractor, at Contractor's expense.
20.2 All such repair or replacement work is also hereby absolutely guaranteed
for a period of 1 (one) year from the date of the correction thereof. It
is understood and agreed that Contractor shall supply Owner with a written
guarantee of all Work covered under this agreement and such guarantee will
contain the date upon which said Work was accepted by Owner and the date
upon which the guarantee shall expire.
TWENTY ONE. CONSTRUCTION DRAWINGS.
21.1 Based on actual field measurements, Contractor shall keep a complete set
of drawings and specifications at the Work site, which drawings shall be
maintained current and up to date to reflect any changes due to field
conditions and to modifications to the Specifications requested by Owner.
Such set of reproducible mylar drawings and specifications shall be
delivered to Owner upon termination of the Work, as a record of the Work
done.
21.2 Contractor shall prepare a complete set of drawings as a record of the
Work done from marked up drawings, specifications and changes due to field
conditions and alterations requested by the Owner. These drawings shall be
prepared on reproducible mylar, and must be delivered within 60 (sixty)
days after termination of the Work.
TWENTY TWO. BONDS.
22.1 Upon execution of this Agreement, and before receiving the advance
payment, Contractor shall post an advance payment bond equal to the full
amount of the advance payment required under this Agreement. Such advance
payment bond shall be issued by a bonding company and shall be on terms
reasonably acceptable
10
to Owner. The terms shall include a guaranty of the obligation of
Contractor to complete the Work in accordance with this Agreement.
22.2 On acceptance of the Work by Owner and prior to payment of the holdback
amount, Contractor shall obtain and provide to Owner a performance bond
in the amount of 10% of the contract amount covering the warranty period
and warranty provisions set forth in this Agreement.
22.3 All bonds provided herein shall be issued by bonding companies holding a
Standard & Poor rating of "B" or better or as otherwise approved by
Owner.
TWENTY THREE. RESPONSIBILITIES OF THE PARTIES.
23.1 In addition to the fulfillment of the obligations set forth elsewhere in
this agreement, the parties shall have the following responsibilities:
23.1.1 Contractor shall indemnify and hold Owner harmless from and against all
losses, demands, claims, payments, suits, actions, recoveries and
judgments of any nature brought against it by reason of any acts or
omissions of Contractor, its agents or employees, or of any of its sub-
contractors, their agents or employees, in the execution of the Work,
including, without limitation, the use, discharge, storage or disposal
of any toxic substance or hazardous material or residue.
23.1.2 Owner shall indemnify and hold Contractor harmless from and against all
losses, demands, claims, payments, suits, actions, recoveries and
judgments of any nature brought against it by reason of any acts or
omissions of Owner, its agents or employees.
23.1.3 Contractor shall forever protect and defend Owner in the full and free
use and enjoyment of any and all right to any invention, machines, or
devices which may be used as part of the Work, either in the
construction or use after completion, against all suits of all persons
and shall pay all royalties and license fees necessary for the use and
enjoyment of such inventions, machines, or devices.
23.1.4 Contractor shall further save and hold Owner harmless, from and against
any and all claims, demands, losses, suits, payments, actions,
recoveries or judgments brought against Owner by any of Contractor's
sub-contractors.
TWENTY FOUR. LABOR RESPONSIBILITY.
11
24.1 Nothing contained in this agreement or its exhibits shall create or be
deemed to create a labor relationship between Owner and Contractor's
employees. Contractor has represented to Owner that it has the sufficient
elements of its own which will allow it to fully comply with all labor
responsibilities in regard of its personnel and shall, during the
performance of the Work and the duration of this agreement, continue to
maintain such sufficient elements of its own. Contractor assumes all labor
responsibility for all personnel assigned to or contracted for the
performance of the Work, and agrees to strictly comply with all its
obligations as employer with respect to said personnel under the Federal
Labor Law, the Mexican Institute of Social Security Law, the National
Institute of the Fund for Workers Housing Law and all regulations and
ordinances issued under any applicable law. Contractor agrees to indemnify
and hold Owner harmless in the event of any labor claim filed by any
worker or employee of Contractor or its sub-contractors as well as any
claim filed by the Mexican Institute of Social Security or the Institute
of the National Fund for Workers Housing due to the failure of Contractor
to make payment of the respective dues and taxes.
24.2 Contractor shall appoint Owner as the owner of the Work in the respective
registration notice it files with the Mexican Institute of Social
Security, and Contractor shall provide to Owner the original of said
notice upon final acceptance of the Work.
TWENTY FIVE. SUBCONTRACTORS.
25.1 Contractor shall be fully and solely responsible towards Owner for all
acts and omissions of its sub-contractors and of persons either directly
or indirectly employed by them, as well as for acts and omissions of
persons directly employed by it.
25.2 Nothing contained in this agreement or its exhibits shall create a
contractual or labor relationship between Owner and any of Contractor's
sub-contractors. Contractor is not authorized to make any commitment on
behalf of Owner, unless such is previously authorized in writing.
25.3 Contractor agrees to make that all sub-contractors agree to observe and
fulfill all applicable terms and obligations arising hereof.
25.4 Contractor shall not delegate to any of its sub-contractors the
responsibilities and obligations corresponding to the Contractor under
this agreement.
12
25.5 Contractor shall cause that all provisions contained herein in regard to
warranty, insurance, changes and modifications in the Work, formal
acceptance of the Work and the right to inspect by the Owner, be
included in the agreements entered with each one of the sub-contractors.
TWENTY SIX. CLAIMS.
26.1 Immediately upon the delivery of the final payment or of the retained
percentage, Contractor shall deliver to Owner a complete release and
waiver of lien by Contractor of all claims arising out of this agreement
or payments due to government agencies such as IMSS, Hacienda, STPS,
SAR, INFONAVIT, among others, or receipts for the full value of the Work
in lieu thereof, together with an affidavit stating that the receipts
include all the labor and materials for which a claim could be filed.
Neither the final payment nor any part of the retained percentage shall
be deemed due if the above release and waiver, or receipts, are not
delivered.
TWENTY SEVEN. INSPECTION AND FINAL ACCEPTANCE.
27.1 Prior to acceptance of the completed Work, Owner shall be entitled to
inspect the Work in the following manner:
27.1.1 The Work shall be subject to inspection and test by Owner during its
construction and at all other times and places, including without
limitation the plants and offices of Contractor, and of its sub-
contractors and suppliers.
27.1.2 The Work shall be subject to one final inspection and acceptance. Such
final inspection in full or in part shall be made within 15 (fifteen)
working days after notice of the completion of the Work by Contractor.
27.1.3 After the final inspection is performed, Owner will accept in writing
those areas or systems of the building that have been completed
according to Specifications. At the same time, a "punch list" will be
prepared containing pending or defective items that are to be completed
or repaired within the following 30 (thirty) days. Failure to include
any items on the punch list will not alter the responsibility of
Contractor to complete the Work pursuant to the Specifications.
27.1.4 Within three (3) working days after any inspection requested by
Contractor is performed, Owner shall inform Contractor in writing of any
defects or imperfections of the portion of the Work inspected.
13
27.1.5 Upon request of Contractor, completed defined portions of the Work or
"punch list" items will be subject to inspection by Owner within 3
(three) working days after Owner is notified of their termination, which
partial inspections shall be in accordance with the same terms,
conditions and effects as set for the final inspection. Such partial
inspections will not release Contractor from its guarantee obligation
under Clause Twenty above.
27.1.6 At the time final inspection is performed and the Work is accepted by
Owner, Owner will cancel the bond referred to in clause twenty two,
paragraph 22.1, and Contractor shall deliver to Owner the last bond
mentioned in paragraph 22.2 covering 10% (Ten percent) of the Price with
a term of 1 (one) year to guarantee against construction defects. At
such time, Owner will accept the Work in writing and it shall release
and deliver to Contractor the amount retained.
TWENTY EIGHT. COMPLETION OF THE WORK
28.1 Contractor guarantees that the Work will be completed by the Completion
Date, at which time the industrial building and other improvements
requested by Owner will be fully completed in accordance with the
Specifications and all of its systems and installations will be fully
operable, with the interior of the building finished, in such manner
that it allows Owner to install, test and operate its equipment and
machinery, and test the production of the products it intends to
manufacture.
TWENTY NINE. CONTRACTOR'S RIGHT TO TERMINATE CONTRACT.
29.1 Should Owner fail to pay Contractor any approved payment within 15
(fifteen) days after is due, then Contractor, upon 5 (five) days written
notice to Owner may stop the Work or terminate this Agreement and
recover form Owner payment for all Work executed and reasonable profit.
Owner shall have the right, however, to pay Contractor's invoice, or
approved portion thereof, during the five (5) day period following
written notice thereof, and, in such event, this Agreement shall not be
terminated.
29.2 Should the Work be stopped by a governmental agency or other state or
public office or by any act of negligence of Owner through no fault of
Contractor, Contractor's time for completion of the Work shall be
extended by a like time and such extension shall be evidenced in writing
signed by Owner and Contractor.
THIRTY. OWNER'S RIGHT TO TERMINATE CONTRACT.
14
30.1 Owner, at its discretion, may terminate the agreement at any time by
giving written notice thereof to Contractor at least 15 (fifteen) days
prior to the effective date of termination. Upon receipt of notice of
termination, Contractor shall terminate all work under the agreement on
the date specified in such notice and shall a) terminate all orders and
subcontracts chargeable to the performance of this Contract, which may
be terminated without additional cost; b) terminate and settle, subject
to approval by Owner, other orders and subcontracts where the cost of
settlement will be less than the costs which would be incurred if such
orders and Subcontracts were to be completed and c) transfer to Owner,
in accordance with Owner's directions, all materials, supplies, work in
process, facilities, equipment, machinery or tools acquired by
Contractor in connection with the performance of the Work and for which
Contractor is to be reimbursed hereunder, and all drawings, working
drawings, sketches, specifications and information accumulated for use
in the performance of the Work. Contractor shall, if directed by Owner
and to the extent stated in the notice of termination, do such work as
may be necessary to preserve the Work in progress and to protect
material, plant and equipment on the Work or in transit thereto.
30.2 Upon termination of this agreement and compliance by Contractor, all in
accordance with the provisions of the preceding paragraph, Owner shall
pay to Contractor in discharge of all of its obligations under this
agreement, only for a) such portion of the Work as the Contractor and
its subcontractors shall have completed, plus b) the cost to the
Contractor for materials which have been delivered to the plant site of
the Owner up to the effective date of termination, plus c) the cost to
Contractor of materials to be used in the performance of this agreement
for which bona fide irrevocable orders have been placed by Contractor
prior to the effective date of termination, which have not been
terminated and settled hereunder, provided that such materials are
delivered to Owner within a reasonable period of time after the
effective date of termination, plus d) the cost to Contractor of
termination and settling orders and subcontracts in accordance with this
provision, and plus e) the cost to Contractor of complying with Owner's
directions relative to the preservation of the Work in progress and the
protection of materials, plant and equipment on the work or in transit
thereto. Owner shall have a credit against the aggregate of items a)
through e) above, for the amounts therefore paid by Owner to or for the
account of the Contractor, pursuant to other provisions of this
agreement.
30.3 The payment to be made for any such completed portion of the Work shall
be in the proportion that the completed portion of the Work bears to the
entire Work provided for in this Contract, which portion shall be
determined by the Owner. "Cost to the Contractor" as used herein, shall
include field and home furniture, equipment and
15
business machines and payment of office utility costs directly
applicable to this agreement and not otherwise reimbursed hereunder.
However, Owner shall be under no obligation to pay Contractor for
overhead or anticipated profits on any portion of the Work not
completed. Such costs and expenses shall be subject to audit by Owner.
The sum of all amounts payable under this clause plus the sum of all
amounts previously paid under this agreement shall in no event exceed
the Price.
30.4 The only claim of Contractor against Owner for loss, damage or
otherwise, on account of such termination by the Owner, shall be for the
compensation and payment in accordance with the above provisions.
30.5 In any and all subcontracts entered into between Contractor and its
subcontractors, in any and all other commitments and obligations which
Contractor may undertake or incur, all in connection with the Work under
this agreement, Contractor shall make provisions consistent with this
Clause relative to the termination of the agreement by Owner and the
payment of obligations in connection therewith. Owner shall be under no
obligation to compensate Contractor under the provisions of this Clause
if this agreement is terminated because of default or breach by
Contractor.
30.6 Should the Contractor at any time a) fall into a bankruptcy, makes a
general assignment for the benefit of creditors, makes or permits the
appointment of a receiver for all or a substantial part of its property,
or fails or refuses to prosecute the Work as provided for herein or b)
fails to perform any other requirement of this agreement and does not
cure or begins to cure such failure within ten (10) working days after
written notice thereof is given by Owner, Owner shall have the right, at
its option and without prejudice to any other remedies available to
same, to take possession, for the purposes of completing the Work, of
Owners materials, tools, equipment and appliances at the site, and
either complete or employ any other person or persons to complete the
Work. In case of such termination of the employment of Contractor,
Contractor shall not be entitled to any further payment until the Work
has been fully completed and accepted by Owner, at which time, a) if the
unpaid balance of the Price exceeds the expense (including, but not
limited to, the cost of completing the Work) sustained by Owner on
account of Contractor's default, Owner shall pay the amount of such
excess to Contractor, and b) if such unpaid balance is less than the
expense sustained by Owner, Contractor shall pay the amount of such
difference to Owner.
THIRTY ONE. HOLD HARMLESS.
16
31.1 If for any reason Contractor fails to meet all permitting requirements
or to comply with any laws, regulations, ordinances or guidelines
applicable to its performance of the Work, Contractor shall be
responsible for the payment of any fines or penalties imposed upon
Owner, as well as of all losses, costs and expenses derived from the
suspension of the Work by any governmental agency, and it hereby agrees
to indemnify and hold Owner harmless from and against any and all such
fines, penalties or losses, including any liens on the Work or on the
Property and other expenses that Owner may incur as a result thereof.
THIRTY TWO. TEMPORARY FACILITIES AND UTILITIES.
32.1 Contractor shall provide at its expense all temporary facilities and
utilities required for completion of the Work in accordance with the
Specifications, which shall include, without limitation:
32.1.1 Temporary construction roads, ramps and approaches, and maintain them in
a serviceable condition for use by all persons performing Work in
connection with this agreement.
32.1.2 Main ladders and runways for the performance of the Work. Subcontractors
shall provide additional ladders and runways as required for the
performance of their own work.
32.1.3 Field offices and other temporary structures such as offices,
construction and storage sheds, that Contractor and its subcontractors
may require. When directed by Owner, Contractor shall remove the
temporary structures from the Property if same are not necessary to
continue with the Work.
THIRTY THREE. RECEIPTS FOR TAXES AND EXPENSES.
33.1 Immediately upon Owner's request, Contractor shall deliver to Owner true
copies of all receipts or other adequate evidence, satisfactory to
Owner, of payment of all of Contractor's taxes, and social security and
labor assessments related to the performance of the Work. Further,
Contractor shall, immediately upon Owner's request, furnish Owner with
receipts or other adequate evidence, satisfactory to Owner, of payment
of the subcontractors' fees, purchases of materials, rental of equipment
and any other expenses associated with the performance of the Work.
THIRTY FOUR. REPRESENTATIVES.
17
34.1 Owner designates Xxx XxXxxxx and Xxxxxx Xxxxxxxx as its authorized
representatives, in order to represent Owner before Contractor for all
matters pertaining to the performance of the Work. Any duly accredited
employee, agent or representative of the designated Owner's
representatives shall be entitled to be at any time at the site of the
Work and shall have access to all areas of same, including, without
limitation, the Contractor's on-site offices, with the purposes of
inspecting the Work and signing the Log on a daily basis, as evidence
that such Log is true and current, and duly notified to Owner in
accordance herewith. Owner's authorized representatives shall record any
observations regarding the work progress and performance in both the
Contractor's and the Owner's copies of the Log.
34.2 Contractor designates Xxxxxx X. Xxxxxxxx as its appointed representative
before Owner.
THIRTY FIVE. EXHIBITS.
35.1 All exhibits of this agreement are attached hereto, duly signed by the
parties' representatives and are thus an integral part hereof.
THIRTY SIX. ASSIGNMENT.
36.1 This agreement is binding to both parties hereto, its successors,
assigns and legal representatives. Neither party may assign this
agreement as a whole or in part without the written consent of the
other, nor shall Contractor assign any monies due or to become due
hereunder without the previous written consent of Owner. However, Owner
may assign this agreement to any of its parent companies, subsidiaries,
or affiliates without the consent of Contractor.
THIRTY SEVEN. JURISDICTION AND APPLICABLE LAW.
37.1 For all matters pertaining to the interpretation, fulfillment or
performance of this agreement, the parties submit to the Laws and courts
of the city of Tijuana, Baja California, thereby waiving any other venue
and Jurisdictions they may otherwise be entitled to due to their current
or future addresses, or to any other reason whatsoever.
THIRTY EIGHT. VERSIONS.
38.1 This agreement is executed in two versions. One in the English language
and the other in the Spanish language. Both versions are intended to be
of identical content,
18
meaning and purpose. However, in case of controversy as to their
content, meaning or purpose, the Spanish version shall prevail.
THIRTY NINE. NOTICES.
39.1 All notices required or desired to be given under this Contract shall be
in writing and delivered personally or sent by certified or registered
mail, postage prepaid, return receipt requested, addressed as follows:
TO OWNER: TO CONTRACTOR:
Blvd. Agua Caliente 4558-403 Blvd. Acapulco 14700
Col. Aviacion, 22420 Parque Industrial Pacifico, 22670
Tijuana, Baja California, Mexico Tijuana, Baja California, Mexico.
39.2 Or to such other address as any of the parties may, from time to time
designate in writing and mutually notify in the manner above set forth.
Tijuana, Baja California, December 11, 1997
The Contractor The Owner
By: Mr. /s/ XXXXXX XXXXXXXX- XXXXXX By: Mr. /s/ XXXXXX X. XXXXXXXX
--------------------------- ----------------------
Xx. Xxxxxx Xxxxxxxx- Xxxxxx Xx. Xxxxxx X. Xxxxxxxx
19
